Life Sciences Blog

US ICER: What can we learn from the first completed review?




At the end of November, the Institute for Clinical and Economic Review (ICER) in the United States completed its first cost-effectiveness review for a new medicine – using methodology first revealed in July. These were for PCSK9 inhibitors for cholesterol - Amgen's Repatha (evolocumab) and Sanofi/Regeneron’s Praluent (alirocumab), with a subsequent report published on Swiss company Novartis’s Entresto ((sacubitril + valsartan; LCZ696) for the treatment of heart failure. 

The initial reports for PCSK9 inhibitors concluded that these medicines should be priced 50-85% below the list price level to be cost-effective. For Entresto, ICER’s initial conclusions were kinder: “only” a 17% discount off the list price of $3,779 annually was needed to achieve cost-effectiveness. 

Since these draft reports were published, ICER completed its consultation period on the PCSK9 inhibitors report and on 27 November published its final report. So what can we learn from this first completed review?

ICER methodology in a nutshell
I’ve written a more detailed review of the ICER methodology as a broader special report, but in a nutshell the methodology boils down to the following:

  • ICER conducts a literature review to assess available clinical data, cost per outcomes achieved, benefits and disadvantages and other contextual considerations. These are all grouped together to produce a judgment about care value.
  • ICER then estimates a provisional health system value by integrating the care value judgement with an analysis of the potential short-term budget impact if utilisation of the new technology is unmanaged.
  • Based on its value assessment, ICER then makes conclusions about what the value-based price benchmark (VBPB) for the specific drug or medical device should be.  

The PCSK9 review outcome
Considering the PCSK9 inhibitors review, it is apparent that not much has changed between the first draft review and the final report. In its final report, ICER still maintains that the value-based price benchmark for Praluent and Repatha should be significantly lower than their list price. Interestingly, the final review was accompanied by the publication of action guides for policy makers, clinicians and patients. Among the conclusions in the final report is advice to health insurers to implement prior authorisation requirements for PCSK9 inhibitors, retry on statins patients who believe they are intolerant to them, and only consider lifting prior authorisation guidelines if the price is reduced by 50-85% of the list price.

What next?
It is early days for ICER and its role in the US market access environment is yet to be firmly established. The guidance it produces is by no means mandatory and has no legally binding impact on funding decisions as the guidance of NICE in the UK does. And health technology assessment (HTA) is a new concept in the US and one that is yet to gain popularity.

Despite that I would argue that the activities of ICER should be carefully monitored because they have the potential to change the market access environment and make HTA more commonly applied in drug reimbursement decisions – or at least more widely known. While private health insurers in the US sometimes conduct an HTA review of sorts, their process and final decision have limited exposure. The ICER guidance is intended for public consumption and is widely available. 

And let’s not forget that the ICER’s calls for reduction on list prices could not have come at a more opportune time in the US: the past few months have seen growing concern among political circles – including from presidential candidate Hillary Clinton – that pharmaceutical prices are too high. And in November both the Department of Health and Human Services (HHS) and Democrats in the US lower chamber of parliament – the House of Representatives – announced separate initiatives to address pharmaceutical price levels in the country.  

And one final thing to consider: ICER’s reports – no matter whether they lack methodological rigour or not – may be used as ammunition by health insurers in their attempt to secure price discounts. Notably, just weeks after the ICER draft guidance, Express Scripts – the United States’ largest pharmacy benefit manager (PBM) - , Express Scripts, agreed to include PCSK9 inhibitors Repatha and Praluent on its National Preferred Formulary (NPF) as a result of “a combination of discounts and a rigorous utilisation management programme”. Amgen subsequently entered a pay for performance agreement for Repatha with health plan Harvard Pilgrim Health Care and a separate deal with CVS Health. 

While no health insurer has yet stated formulary listing decisions have been in any way influenced by the ICER reports, the fact remains that these reports are publicly available and can be used – particularly by the smaller health insurers with no internal HTA capability of their own – to justify their requests for discounts or pay for performance deals. And on the flip side, in cases when ICER finds the value-based price is very close to the list price, pharmaceutical companies can use that conclusion as justification for not offering significant discounts.

Milena Izmirlieva is head of the research team at IHS Life Sciences.
Posted 10 December 2015

 

About The Author

Milena Izmirlieva is head of the Life Sciences research team at IHS Markit. Her areas of expertise include market access, pricing and reimbursement, HTA, generics and biosimilars, corporate strategies, and pharma promotion and advertising.